Wool market update - 20 October

In welcome news to sellers across the country, the Australian wool market has recorded a healthy increase this week, driven by solid price rises in merino fleece types.

There were originally 43,041 bales rostered for sale and some industry observers feared that the market would struggle with this quantity. These fears turned out to be unwarranted as the market opened stronger and then slowly but noticeably increased as the series progressed. Worth noting however, the national offering reduced to 39,157 bales, which was very similar to the previous week, after 9.0 pc (percent) of the offering was withdrawn prior to sale.

The movements in the individual Micron Price Guides (MPGs) for merino fleece finer than 21.0 micron ranged between plus 1 and plus 56 cents. The AWEX Eastern Market Indicator (EMI) rose by 11 cents for the week, closing at 1,139 cents.

The crossbred and oddment sectors went against the trend of the overall market recording losses. These falls prevented the EMI from recording a larger increase. The market was best described as steady for the entire series, this was highlighted by the movements in the EMI which were plus 6 on day one and plus 5 on day two.

Most sellers across the country were prepared to accept the prices on offer, nationally the passed in rate was just 4.7 pc, this was the lowest passed in rate since October last year, when the EMI recorded a 52 cent rise.  Despite the EMI being 184 cents lower than this time last year, the season to date passed in rate is currently 8.9 pc, this is 4.1 pc lower than the corresponding sale of the previous season.

Next week the national offering is forecast to increase. 42,117 bales are currently expected to be offered in Melbourne, Fremantle and Sydney.